Reviewing Arbor Realty Trust (NYSE:ABR) and Safety Income & Growth (SAFE)

Safety Income & Growth (NYSE: SAFE) and Arbor Realty Trust (NYSE:ABR) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Profitability

This table compares Safety Income & Growth and Arbor Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safety Income & Growth N/A N/A N/A
Arbor Realty Trust 57.54% 11.61% 2.77%

Dividends

Safety Income & Growth pays an annual dividend of $0.15 per share and has a dividend yield of 0.8%. Arbor Realty Trust pays an annual dividend of $0.76 per share and has a dividend yield of 8.9%. Arbor Realty Trust pays out 75.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Safety Income & Growth has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Safety Income & Growth and Arbor Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safety Income & Growth 0 5 1 0 2.17
Arbor Realty Trust 0 2 1 0 2.33

Safety Income & Growth currently has a consensus target price of $20.58, suggesting a potential upside of 14.78%. Arbor Realty Trust has a consensus target price of $8.75, suggesting a potential upside of 2.82%. Given Safety Income & Growth’s higher possible upside, analysts plainly believe Safety Income & Growth is more favorable than Arbor Realty Trust.

Insider & Institutional Ownership

40.3% of Safety Income & Growth shares are owned by institutional investors. Comparatively, 45.7% of Arbor Realty Trust shares are owned by institutional investors. 16.5% of Arbor Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Safety Income & Growth and Arbor Realty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Safety Income & Growth $21.74 million 15.00 $6.61 million N/A N/A
Arbor Realty Trust $116.17 million 4.52 $50.34 million $1.01 8.43

Arbor Realty Trust has higher revenue and earnings than Safety Income & Growth.

Summary

Arbor Realty Trust beats Safety Income & Growth on 9 of the 13 factors compared between the two stocks.

Safety Income & Growth Company Profile

Safety, Income and Growth, Inc. is formed primarily to acquire, own, manage, finance and capitalize ground net leases (GNLs). The Company’s portfolio consists of 12 properties, which includes Doubletree Seattle Airport, One Ally Center, Hilton Salt Lake, Doubletree Mission Valley, Doubletree Sonoma, Doubletree Durango, Dallas Market Center: Sheraton Suites, Northside Forsyth Hospital Medical Center, NASA/JPSS Headquarters, The Buckler Apartments, Dallas Market Center: Marriott Courtyard and Lock Up Self Storage Facility.

Arbor Realty Trust Company Profile

Arbor Realty Trust, Inc. is a real estate investment trust. The Company invests in a portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. Its segments include Structured Business and Agency Business. In addition, the Company may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. It focuses on investment types, such as Bridge Financing, Mezzanine Financing, Junior Participation Financing and Preferred Equity Investments. It offers bridge financing products to borrowers, typically seeking short-term capital to use in an acquisition of property. It offers mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction.

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